farnborough airshow - apresentação aviação comercial

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  • 1. AIRLINE MARKET OUTLOOK Frederico Fleury Curado Executive Vice-President, Airline Market Farnborough 2006 Investors Meeting July 19th, 2006

2. Forward Looking StatementThis presentation includes forward-looking statements or statements about events or circumstances which have not occurred. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting our business and our future financial performance. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among other things: general economic, political and business conditions, both in Brazil and in our market. The words believes, may, will, estimates, continues, anticipates, intends, expects and similar words are intended to identify forward-looking statements. We undertake no obligations to update publicly or revise any forward-looking statements because of new information, future events or other factors. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation might not occur. Our actual results could differ substantially from those anticipated in our forward-looking statements.THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAERS WRITTEN CONSENT. 3. Contents Q Airline Market Scenario and TrendsQ Important Issues in the 30-120 Seat Segment: RJ 50: an intrinsic part of the air transportation system E-Jets: matching aircraft capacity to market demand Q Market ForecastTHE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAERS WRITTEN CONSENT. 4. Airline Market Scenario and Trends 5. Positive World Economic Scenario 2006-2025 economic scenario is sustaining Air Travel Demand growthProjected Traffic and Economic Growth by Region (Average Annual Growth) WorldUSA, Canada & Caribbean Latin AmericaEurope RPK Russia & CISGDPAfrica Middle East Asia PacificChina0%1% 2% 3% 4%5% 6% 7% 8%Source: Global Insight and EmbraerTHE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAERS WRITTEN CONSENT. 6. Increased Air Travel Demand Traffic is recovering at strong growth rates but in another environment 700080% RPKASK Load Factor 78% 6000 76% Billion (RPK & ASK) 5000 % (Load Factor) 74% 400072%300070% 68% 2000 66% 1000 64%062%19951996 199619981999 200020012002 20032004 20052006F2007F 6.3% yoy 7.7% yoy 6.4% yoy Source: ICAO - Contracting States - Scheduled Airlines THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAERS WRITTEN CONSENT. 7. Revenue Environment World yields are improving, but trend in real terms remains low105 100 95 Index (1994=100)90 85 80 75 World Nominal Yield70 World Real Yield (adj. for US inflation)651994 19951996 199719981999 2000 2001 2002 2003 2004 2005F 2006F 2007F World real yields in 2005 are 28% lower than 1994 values in an environment where LCCs pricing power is the main driver. Source: ICAO (Contracting States - Scheduled Airlines), Global Insight (USA CPI Inflation) and IATA EconomicsTHE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAERS WRITTEN CONSENT. 8. Financial Net Results Some improvement to profitability, projecting a healthier 2007 North America Europe-6.7 -5.20.0 World 1.6 1.3 1.4 -3.2 -3.03.32005 2006F 2007FMiddle East2005 2006F 2007F0.2 0.10.3 2005 2006F 2007F 2005 2006F 2007FAsia Pacific Latin America2.1 1.72.0 Africa -0.1 0.10.2-0.4 -0.9 -0.6 2005 2006F 2007F 2005 2006F 2007F 2005 2006F 2007F Source: IATA (Jun/06) Values in US$ BillionTHE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAERS WRITTEN CONSENT. 9. End of Cheap Jet Fuel Lack of spare oil production capacity remains high price trend8595 Capacity 90 Crude Oil 80DemandJet FuelMillions of Barrel per Day 85 75Price (US$/Barrel) 80 7075 70 65 65 6060Current jet fuel 55 55 price 48% higher 50 than Jan/05 5045May05 May06Jul05Mar05 Mar06Jan05 Jan06Sep05 Nov05197019751980198519901995 2000 2005 For coming years oil barrel is expected to stay at US$60-70 level and jet fuel at US$1.70-1.90/gallonSource: EIA - Energy Industry Administration (Jun/06)THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAERS WRITTEN CONSENT. 10. Higher Competitive Environment LCC will keep capturing market share from Network carriers USA Domestic RPMIntra Europe RPK 5%11% 12%17%16%16% 19% 29% 11%31%19%34% 76%72%60%65%57%50% 2000 2005 2010E2000 2005 2010ENetwork LCC Regional Source: Back Aviation and EmbraerTHE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAERS WRITTEN CONSENT. 11. LCC & Network Cost Convergence1Q 2006 1Q 2005 AirlinesOperatingOperating Net OperatingOperating Net Result Net Result Net Margin Result MarginMarginResult Margin (MM) (MM) (%)(MM)(%)(%) (MM)(%) American$52 -$106 1,0% -2,0%-$44 -$171 -0,9%-3,6% Continental $11 -$660,4% -2,2%-$173-$186 -6,9%-7,4% NetworkDelta -$485-$2.069 -13,0%-55,6% -$957 -$1.071 -25,8%-28,9% Northwest-$15-$1.104-0,5%-38,2% -$301-$529-10,8%-18,9% United *-$168 $22.411 -3,8% - -$239 -$1.012-6,1%-25,8% US Airways $125$654,7%2,5% $45 -$174 6,1% -23,7% ExpressJet$37$249,2%5,9% $39$2310,3% 6,2% RegionalSkywest $83$35 11,2%4,6% $34$1910,1% 5,5% Pinnacle$22$13 10,4%6,4% $20$2310,3%12,0% Republic$48$17 18,6%6,6% $37$1517,4% 7,1% Southwest $98$614,9%3,0% $81$594,9%3,5% JetBlue-$25 -$32-5,1%-6,5% $25 $66,7%1,6% LCCAlaska Group-$125 -$79 -17,0%-10,8%$27-$81 4,2% -12,5% AirTran -$4-$5-1,1%-1,1% -$9-$8-3,2%-2,7%* United: Net Result includes reorganization items (the discharge of claims and liabilities primarily relates to those unsecured claims arising during the bankruptcy process. United recognized a non-cash reorganization gain of $24.4 billion in the 1Q06).Source: Airlines (Total System: Domestic and International) THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAERS WRITTEN CONSENT. 12. Opportunities for Rightsizing Additional opportunities are still in the marketplace6,018routes with less than twoaverage daily frequency 41% USA & EuropeAverage Daily Frequency by RouteRoutes operated exclusively by Jet Aircraft34%from 91 175 seats up to 2000 nm% of Routes17% 6%2% 0 - 0,50,5 -

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